options market making, seed capital

Discussion in 'Professional Trading' started by mmt, Jun 4, 2014.

  1. 1245

    1245


    Did you electronically send out your quotes? If yes, what platform did you use? I left the floor in early 2010 and I was using Actant. Also, what exchange were you a member of?
     
    #41     Jun 4, 2014
  2. mmt

    mmt

    Yes, electronically sent. The platform was internally built by my employer. Liffe and eurex member.

     
    #42     Jun 4, 2014
  3. bone

    bone

    I agree with Mav completely. Just know that some of these products are not "day trades" and you will likely need to find a way to hedge them before your next look comes along. And the margin requirements for many physical products can be very beefy. Lots more to it than buying bids and selling offers for the most part.
     
    #43     Jun 6, 2014
  4. 2rosy

    2rosy

    get relationships with brokers and make markets in clearport or ice products. power, natgas, coal, CSOs, manure. streaming quotes to an exchange might get you scraps if you're lucky
     
    #44     Jun 6, 2014
  5. bone

    bone

    I really can't think of a worse trading space for someone completely naïve about the actual products to just start quoting bids and offers. Especially to savvy OTC brokers who are looking to keep their best and longest tenured clients happy.
     
    #45     Jun 6, 2014
  6. Sancho

    Sancho

    Does anyone have any experience with Cutler? What is the leverage that they offer? How much capital do you need to put down?
     
    #46     Aug 15, 2014
  7. 1245

    1245

    You really need to contact them. You can't assume they will take everyone. I spoke to them around 2010. Their minimum back then was around $150K. They keep around 16% of profits and your overhead will be high between Actant and exchange fees and their monthly overhead fee they charge. If you make markets in a lot of CBOE products it can get to around $10K a month, and your money is 1st loss.

    Why anyone would want to make markets in equity options with 9 option exchanges, off floor brokers shopping the large orders, regulatory over-site and high fixed costs, I have no idea. It's a tough battle without directed order flow. I left the trading floor in 2010 because the vig is gone as a local MM.

    1245
     
    #47     Aug 15, 2014
  8. Maverick74

    Maverick74

    I know a professional retail firm that picks MM apart and tears them to pieces. Yeah the overhead makes no sense to me. Put up 150k and you have 120k a year in overhead. Need to double your money to break even. Sign me up!
     
    #48     Aug 15, 2014
  9. Sancho

    Sancho

    Given that is not a choice. Are there any props that will give you leverage for trading options? I looked up cassandra but their site is down.
     
    #49     Aug 16, 2014
  10. Maverick74

    Maverick74

    Most the JBO's left the business. The new regulations made it insanely expensive to run a JBO and the profits just aren't there.

    FWIW, options on futures are given risk based margin that are similar to the haircuts you got in a JBO.
     
    #50     Aug 16, 2014